Abstract

In this study the perceptions of small-scale commercial farmers in Eritrea of the importance of
various risk responses are ascertained and analysed to gain insight into their risk-management
strategies. Data were elicited through a survey of 186 small-scale commercial farmers conducted
in three zobatat (regions) of Eritrea. Factor Analysis is used to investigate heterogeneity in sample
farmers' responses. Results indicate that relatively more important risk responses include the use
of internal and external sources of information, on-farm and off-farm diversification, choice of
production system and product marketing arrangements. Farmers' perceptions of risk responses
vary according to farm type, geographical location, farm and farmer characteristics, as well as
the existence of enterprise specific risk responses (e.g. livestock insurance) and differences in the
marketing regulations of various agricultural products.